Monday December 22, 03:35 PM
OECD sees 25m jobs at risk as Toyota warns on profits
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TOKYO (AFP) - The global economic crisis could put an extra 25 million people out of work, the OECD warned, as Japan's iconic Toyota auto company on Monday forecasted its first ever operating loss and European stocks plunged on pre-Christmas gloom.
The head of the Organisation for Economic Cooperation and Development in Paris, Angel Gurria, warned that 20-25 million people throughout the world could lose their jobs between now and 2010.
"We're heading for a loss of between eight and 10 million jobs in the (30-country) OECD area... and 20 to 25 million in the world as a whole between now and 2010," Gurria said on France's BFM radio.
The European Union should "go beyond" the fiscal stimulus plans already announced, equivalent to around 1.4 percent of gross domestic product, since "all the other major countries are going beyond that," Gurria added.
The news came as Toyota, which vies with GM (NYSE: GM - news) to be the world's largest automaker, said it faced an "unprecedented crisis" and expected a loss of 150 billion yen (1.69 billion dollars) -- its first since it started reporting earnings in 1941.
The Japanese government meanwhile expressed deep concern about the outlook for its economy.
The Toyota announcement was matched by downbeat news from Europe, where the CAC 40 (Paris: news) stock market index in Paris plunged 1.78 percent, the Frankfurt DAX was down 1.61 percent and the FTSE 100 in London slid 1.15 percent.
A poll in Germany, showed that consumer confidence in Europe's biggest economy has stagnated at less than half the rate at which it was December 2007.
And Russia's biggest car plant, Avtovaz, part owned by France's Renault (Paris: FR0000131906 - news) , said it was suspending production for January because of the economic crisis.
In the eurozone economies, industrial orders were down 4.3 percent in October compared to September, falling by 15.1 percent year-on-year, data published by the European statistics office Eurostat showed.
The European single currency rose above 1.40 dollars on foreign exchange markets, following the US government's rescue package for its auto industry.
A speech by European Central Bank President Jean-Claude Trichet expected on Monday was being closely watched for comments on the strengthening of the euro.
Finance leaders forecast hard times for 2009, warning it could be even worse than this year despite huge government measures to boost spending and stem the tide of bad data.
"Our forecasts are already very dark, but they will be even darker if not enough fiscal stimulus is implemented," International Monetary Fund director Dominique Strauss-Kahn said on Sunday.
"I can see that some measures have been announced, but I'm afraid it won't go far enough," he told BBC radio, predicting recession for advanced economies and slowing growth for emerging ones.
Despite the lengthening shadows, Tokyo's Nikkei (news) stock market index gained 1.57 percent on Monday. In Hong Kong however shares dived 3.3 percent, Shanghai lost 1.52 percent and Sydney closed 1.6 percent down.
Toyota's forecast also came as new data in Japan, the world's second-biggest economy after the United States, showed a record drop in exports and the government forecast that the economy was getting worse.
"If we don't do anything, Japan will absolutely get mired down," Economy and Fiscal Policy Minister Kaoru Yosano said of the data.
Hiroshi Watanabe, an economist at the Daiwa Institute of Research, said: "Japan has been hit by an unprecedented, sudden change in climate."
Toyota said it was cutting back on production and investment as a slump in sales and a soaring yen wreaked havoc on its balance sheet, including freezing the launch of a new factory in Mississippi and slashing production in India.
Meanwhile there was fresh movement to stop the meltdown, with a decision by US president-elect Barack Obama to add 500,000 jobs to a 2.5-million-job creation goal to kickstart the world's biggest and ailing economy.
Vice president-elect Joseph Biden also confirmed the Obama team was working on a second economic stimulus package. According to US media, they want to craft a package worth between 675 and 775 billion dollars over two years.
In Europe, the Irish government said it was injecting 5.5 billion euros (7.6 billion dollars) to recapitalise three major banks: Anglo Irish Bank (Dublin: CKL1.IR - news) , Bank of Ireland (Dublin: BIR.IR - news) and Allied Irish Banks (Dublin: AIB.IR - news) .
British Prime Minister Gordon Brown promised to create at least 100,000 new jobs through a 10-billion-pound investment in infrastructure, in a newspaper interview.
The Bank (NASDAQ: TBHS - news) of England's deputy governor John Gieve said in an interview with BBC television that the bank under-estimated how serious the credit crunch would be even though it knew that "crazy borrowing" was taking place.
Gieve said the Bank of England had predicted a correction as far back as two years ago but he added: "We didn't think it was going to be anything like as severe as it turned out to be."
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